Russia cancels Libya’s $4.5 bn debt in exchange for contracts

(Lead) RIA Novosti Tripoli, April 17 (RIA Novosti) Moscow Thursday wrote off Libya’s $4.5 billion debt in exchange for contracts for Russian companies worth several billions of dollars. The debt abrogation was part of an intergovernmental agreement on bilateral economic and financial relations signed by visiting Russian President Vladimir Putin and Libyan leader Muammar Qaddafi.

After the signing ceremony, the outgoing Russian leader told reporters: “We are satisfied with the way we have resolved this problem. I am absolutely convinced that the scheme we have arrived at will benefit both the Russian and the Libyan economies, as well as the Russian and the Libyan people.”

More than ten agreements were reached, including a contract for the Russian Railways worth more than $2 billion, Putin said.

Another major deal was closed between Russian natural gas giant Gazprom and Libya’s National Oil Corporation to set up a joint venture to engage in both upstream and downstream oil and gas operations.

An agreement on military cooperation was also signed.

Russian Finance Minister Alexei Kudrin told reporters that the size of Libya’s debt to Russia had been brought down by $100 million from $4.6 billion to take into account Russian state bank VTB’s debt to Libyan companies.

Putin arrived in Tripoli Wednesday for a two-day visit. He was scheduled to leave for Sardinia Thursday evening to meet Italian president-elect Silvio Berlusconi. RIA Novosti